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Smt. Sarla Devi Vs. Wealth-tax Officer - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Delhi
Decided On
Judge
Reported in(1982)1ITD920(Delhi)
AppellantSmt. Sarla Devi
RespondentWealth-tax Officer
Excerpt:
.....and we find that he has completed the assessments for these years and had also prepared the demand notices. however, these were despatched by him to the assessee's old address, which was 19/2b shakti nagar, delhi. at the material time, the assessee had already shifted her residence permanently to niti bagh, new delhi. there is no evidence on the file to show that the notices, which were sent by registered post, were served on the assessee. the wto, also, has not made any attempt to get any certificate from the postal authorities that the notices have been served on her. in the circumstances, when the assessee has categorically stated that she has not received the assessment orders and the notices of demand, there is no material for disbelieving her statement to that effect. in.....
Judgment:
1. As common contentions are involved in these three appeals, filed by the assessee, they have been heard together and are being disposed of by a common order.

2. The main contentions in these appeals are against levy of interest for non-payment of tax and the valuation of jewellery by the WTO, which according to the assessee, is excessive. However, in all these appeals a preliminary objection has been taken by way of grounds of appeal, to the effect that neither the assessment order nor the demand notice for the three years had been served on the assessee and, accordingly, the legal consequence is that no assessments have been made on the assessee for these years. Accordingly, it is contended that no interest could be charged on the assessee for non-payment of the tax, which has not been demanded.

3. We have gone through the WTO's records and we find that he has completed the assessments for these years and had also prepared the demand notices. However, these were despatched by him to the assessee's old address, which was 19/2B Shakti Nagar, Delhi. At the material time, the assessee had already shifted her residence permanently to Niti Bagh, New Delhi. There is no evidence on the file to show that the notices, which were sent by registered post, were served on the assessee. The WTO, also, has not made any attempt to get any certificate from the postal authorities that the notices have been served on her. In the circumstances, when the assessee has categorically stated that she has not received the assessment orders and the notices of demand, there is no material for disbelieving her statement to that effect. In fact, even for filing the appeals before the AAC, the assessee had to apply for and obtain certified copies of the assessment orders and the notices of demand. In these circumstances, the contentions of the assessee that no interest could be charged on her for non-payment of the demands resulting from the impugned assessments, would appear to be correct.

4. We are, immediately, concerned with the legal consequences arising out of the non-service of the assessment order and the demand notice.

The learned counsel for the assessee contends that the WTO's order should be quashed as illegal. We are unable to accept this plea in toto. No doubt, when an assessment is completed it is incumbent on the WTO to serve on the assessee a notice of demand as laid down in Section 30 of the Act, along with a copy of the assessment order. Insofar as this has not been done, there is an illegality supervening after the order of assessment has been passed by the WTO. However, in the light of the decision of the Supreme Court in Guduthur Bros. v. ITO [1960] 40 ITR 298, the matter will be restored to the point at which such illegality has supervened, namely, the stage at which the assessment orders have been passed by the WTO. He will serve copies of the assessment orders and notices of demand, afresh on the assessee at the correct address of the assessee. The demands made on the assessee could be enforced only after such proper notices are served on her.

5. It was submitted on behalf of the assessee that she has already paid certain amounts by way of tax, after the impugned assessments were passed by the WTO as recovery proceedings were taken against her during the pendency of the appeals. Needless to say, the WTO will adjust such payments before serving fresh demand notices on the assessee.

6. To enable the WTO to comply with these orders, we would set aside the impugned orders of the authorities below and restore the matter to the file of the WTO in order to comply with the requirements of law, in the light of our observations (supra).

7. In the light of the above directions, we are not, for the present, going into the ground with regard to the valuation of jewellery. As far as the charging of interest for non-payment of tax is concerned, it would follow that as there has been no proper service of the notice of demand, in the first instance, it could not be said that there was any default on the part of the assessee in the payment of tax and the legal consequences of this finding will necessarily follow.


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